G20 leaders wrangle as riot hits summit city
London — World leaders wrangled Wednesday about how to fix the global economy, as anti-capitalist protestors attacked a bank in central London on the eve of a crunch G20 summit.
Demonstrators laid siege to the Bank of England and smashed the windows of a nearby bank that has become a symbol of the financial crisis in Britain, which has been hit hard by the credit crunch and its economic fallout.
Security is water-tight ahead of Thursday’s Group of 20 summit, where leaders including US President Barack Obama are struggling to overcome US-Europe tensions over how to ease the global slowdown.
Several thousand demonstrators invaded London’s main financial district and tensions spilled over when protesters smashed their way into an office of Royal Bank of Scotland, which was taken into state ownership last year.
Police said they made 19 arrests in the clashes, which came as world leaders held pre-summit talks trying to iron out differences over whether tighter regulation or further fiscal stimulus would do more to ease the crisis.
France and Germany demanded tough action by the summit and Obama warned the United States could no longer be counted on to be the "voracious consumer" which would lead worldwide growth.
French President Nicolas Sarkozy said France and Germany rejected the current summit proposals on reforming the financial system and cracking down on tax havens and corporate bonuses.
But other leaders played down his threat to walk out of the summit which even the German government said was "not the best idea".
"I’m confident that President Sarkozy will be at the first course of the dinner and that he will complete the dinner," said British Prime Minister Gordon Brown of the threat, referring to a pre-summit leaders’ meal at Downing Street Wednesday night.
Sarkozy and Brown held telephone talks Wednesday ahead of the summit and agreed on the need for tougher world finance rules, the French presidency said.
But Sarkozy said before leaving Paris there had been no agreement on a summit communique.
"Neither France nor Germany are satisfied with the proposals as they currently stand," said the French leader.
"I will not associate myself with a false summit, that concludes with a statement of hollow compromises, that does not address the problems that we face."
Obama and Brown, who is struggling to bridge the summit gap between the US and Europe, played down the differences but not the scope of the crisis that the summit will have to confront.
"Make no mistake, we are facing the most severe economic crisis since World War II, and the global economy is now so fundamentally interlinked that we can only meet this challenge together," said the US president, who has also held his first face-to-face meetings with Russia’s President Dmitry Medvedev and China’s President Hu Jintao.
After Obama’s talks with his Chinese counterpart, the pair pledged to support global trade and investment flows and work to resist protectionism, the White House said.
"China and the United States are committed to resist protectionism and ensure sound and stable US-China trade relations," said a statement issued after Obama met Hu at the US ambassador’s residence in London.
China has previously singled out the US for criticism over protectionist measures.
Obama insisted that while the summit had a duty to produce "the most substantive outcome possible," the "separation between the various parties has been vastly overstated."
The US leader has said stimulus and regulation are needed. He added that the United States could not shoulder all responsibility for generating new growth.
"Everybody is going to have to pick up the pace and I think that there is a recognition based on the conversations that I’ve had with leaders around the world that that is important," he said.
German Chancellor Angela Merkel voiced her concern before leaving Berlin.
"I am going to London with a mixture of confidence and concern. Concern on one hand on whether we can really react to the serious situation… Confident, however, that… we cannot stick our heads in the sand," she said.
Merkel has spoken out against governments like the US and Britain spending their way out of the crisis.
But her fears were dismissed by Prime Minister Taro Aso of Japan, whose country spent massively spent to re-ignite the economy following the Asian financial crisis.
"Because of the experience of the past 15 years, we know what is necessary, while countries like the US and European countries may be facing this sort of situation for the first time," he told the Financial Times.